Tiktok shuts down India business but continues to engage with government

China's ByteDance will shut its India business and cut the 2,000-plus employees to a bare minimum over the uncertainty in making a comeback following a ban on its hugely popular TikTok video app in the country, the company told employees in an internal memo on Wednesday.

Tiktok's global interim head Vanessa Pappas and vice president for global business solutions Blake Chandlee in a joint email to employees have communicated the decision of the company to reduce its team size and the decision will impact all employees in India.

According to sources at ByteDance, the company is retrenching its workforce in India and will continue to operate with skeletal staff in select department such as legal, administrative, human resource, accounts etc, to facilitate the settlements and engagement with the government.

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Pappas and Tiktok's global general counsel Erich Andersen briefed employees in a town hall on Wednesday morning about the lay-off plan and offered them three-month salary as well as additional month remuneration in proportion to the number of years they have worked for the company.

The executives expressed uncertainty on the company's comeback to India but expressed hope to do so in times to come.

"While we don't know when we will make a comeback in India, we are confident in our resilience, and desire to do so in times to come," Pappa and Chandlee said in the joint email.

When contacted, a Tiktok spokesperson said the company has worked steadfastly to comply with the Government of India order issued on June 29, 2020 and continually strives to make its apps comply with local laws and regulations.

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"It is therefore disappointing that in the ensuing seven months, despite our efforts we have not been given a clear direction on how and when our apps could be reinstated. It is deeply regretful that after supporting our over 2,000 employees in India for more than half a year, we have no choice but to scale back the size of our workforce.

"We look forward to receiving the opportunity to relaunch TikTok and support the hundreds of millions of users, artists, story-tellers, educators and performers in India," the spokesperson said.

Video sharing apps Tiktok and Helo of ByteDance were among the 59 apps blocked by the government in June. Last week, the Ministry of Electronics and IT further communicated to the companies that the order to block them will continue.

"We've cut expenses while still paying benefits. However, we simply cannot responsibly stay fully staffed while our apps remain un-operational. We are fully aware of the impact that this decision has for all of our employees in India, and we empathise with our team," the email said.

ByteDance executives said the decision to ban its app came despite the company complying with local laws and regulations.

"We have done our best since then to address their (Indian government's) concerns. We regret that this was the result of a lack of clear direction from the Government of India on how and when our apps could be reinstated.

"Despite our efforts to communicate with them, especially since it impacts the careers and livelihoods of so many Indians, today we are forced to reduce the size of our team," the email said.